Net insurance service income increased 4.0% in 2025 after declining a year earlier.
Asia-Pacific reinsurers saw a recovery in revenue in 2025 as overseas business helped offset softer market conditions across the region, according to AM Best.
Net insurance service revenue for AM Best’s composite of Asia-Pacific reinsurance companies increased 4.0% in 2025, reversing the decline recorded a year earlier.
The report, “Asia in Focus: Resilience Through Transformation”, said overseas business has been particularly attractive to Asia-Pacific reinsurers because it has a higher concentration of non-proportional treaties.
This has allowed reinsurers to benefit more from the favourable pricing conditions that have remained since the reinsurance market entered a hard phase.
Underwriting profitability also remained strong, although the composite’s combined ratio increased by less than one percentage point to 92.0% in 2025.
AM Best attributed the result to improved rate adequacy and relatively limited catastrophe activity across Asia.
AM Best expects reinsurance buyers in Asia to have more favourable conditions during the 2026 renewal season, with abundant capacity and falling rates giving cedents more scope to improve protection and support growth. Retention levels are expected to remain broadly stable.
For 2027, AM Best expects rates to continue easing on treaties that have not been affected by losses.
Reinsurance capacity also remains abundant across Southeast Asia and India, supported by reinsurers’ appetite for the markets and confidence in their growth prospects. Earnings remain supportive despite elevated catastrophe claims.
The report also highlighted the planned 2027 merger of Mitsui Sumitomo Insurance (MSI) and Aioi Nissay Dowa Insurance (ADI) in Japan.
The combined insurer could require less reinsurance capacity than the two companies’ programmes separately, potentially increasing competition among reinsurers.
As market conditions become more competitive, cedents are also taking a more selective approach to reinsurance purchases. They are making targeted changes to their programmes and retention levels to improve capital efficiency and maintain more stable earnings.